Keros Therapeutics, Inc. · NASDAQ:KROS
Keros Therapeutics — Proxy Contest (May 2025)
36 slides from Keros Therapeutics's proxy contest presentation, May 21, 2025
Slide 1: Keros Therapeutics Must Act Now to Reposition the Company and Restore Stockholder Confidence
KEROS THERAPEUTICS MUST ACT NOW TO REPOSITION THE COMPANY AND RESTORE STOCKHOLDER CONFIDENCE MAY 2025
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation is for general informational purposes only, is not complete and does not constitute an agreement, offer, a solicitation of an offer, or any advice or recommendation to enter into or conclude any transaction or confirmation thereof (whether on the terms sho
Slide 3: Why We Are Withholding Votes for Two Directors This Year
Why We Are Withholding Votes for Two Directors This Year ADAR1 intends to “WITHHOLD” votes for Dr. Mary Ann Gray and Dr. Alpna Seth at the 2025 Annual Meeting • ADAR1 Capital Management has been a committed investor in Keros Therapeutics for nearly two years and is the Company’s largest stockholder,
Slide 4: Table of Contents
Table of Contents I Executive Summary 5 II We Believe Keros’ Board and Leadership Team Have Mismanaged the Clinical Pipeline 10 III Keros’ Mismanagement of Its Pipeline Has Destroyed Stockholder Value 20 IV Keros Is Overcapitalized and Inefficient 25 V We Believe the Board Has Disenfranchised Stockh
Slide 5: Executive Summary
EXECUTIVE SUMMARY
Slide 6: Executive Summary
Executive Summary We believe Keros’ Board of Directors is squandering the Company’s potential We believe the Board and leadership team Keros must take immediate action to mismanaged Keros’ clinical pipeline Keros has not created value for stockholders reposition the Company for value creation • Two
Slide 7: About Keros Therapeutics (NASDAQ: KROS)
About Keros Therapeutics (NASDAQ: KROS) Keros is a clinical-stage biopharmaceutical company focused on the Indexed Total Shareholder Return Since IPO1 discovery, development, and commercialization of treatments for patients 300% suffering from hematological, pulmonary, and cardiovascular disorders 2
Slide 8: Overview of ADAR1 and Our Engagement with Keros Therapeutics
Overview of ADAR1 and Our Engagement with Keros Therapeutics Firm Overview: • Established in October 2018 | Headquartered in Austin, TX | $819+ million of AUM1 • Founded by Dr. Daniel Schneeberger, who brings over 20 years of experience across scientific research, healthcare consulting, institutiona
Slide 9: ADAR1 Intends to Vote WITHHOLD on Dr. Mary Ann Gray and Dr. Alpna Seth
ADAR1 Intends to Vote “WITHHOLD” on Dr. Mary Ann Gray and Dr. Alpna Seth We are disappointed with the Company’s trajectory and believe that change is needed to protect stockholder value Dr. Mary Ann Gray Keros’ Board has not created value and must be held accountable No track record of creating va
Slide 10: We Believe Keros' Board and Leadership Team Have Mismanaged the Clinical Pipeline
WE BELIEVE KEROS’ BOARD AND LEADERSHIP TEAM HAVE MISMANAGED THE CLINICAL PIPELINE
Slide 11: Cibotercept (KER-012) Is Unsafe in PAH
Cibotercept (KER-012) Is Unsafe in PAH Given what is likely an on-target safety risk associated with cibotercept, we do not believe a viable development path exists • Pericardial effusions are a potentially-fatal side effect that have shown up across dose levels. As a result, the DSMB required halti
Slide 12: Cibotercept (KER-012) Has No Future in Osteogenesis Imperfecta (OI) or Other Indications
Cibotercept (KER-012) Has No Future in Osteogenesis Imperfecta (OI) or Other Indications Given what is likely an on-target safety risk associated with cibotercept, we do not believe a viable development path exists • It will be quite difficult to overcome the safety risk from the PAH trial if cibote
Slide 13: Cibotercept (KER-012) Has No Future in OI or Other Indications (Cont.)
Cibotercept (KER-012) Has No Future in Osteogenesis Imperfecta (OI) or Other Indications (Cont.) KER-012 biomarker data falls short of the (safer) competition • KOLs and literature suggest that P1NP is the most predictive biomarker for bone growth in OI • Cibotercept's P1NP data is inferior to setru
Slide 14: Cibotercept (KER-012) Has No Future in OI or Other Indications (Cont.)
Cibotercept (KER-012) Has No Future in Osteogenesis Imperfecta (OI) or Other Indications (Cont.) Given the long timelines and high development costs, we believe pursuing cibotercept for OI is a negative NPV investment • Even if cibotercept can overcome the significant safety concerns in OI, its limi
Slide 15: KER-065 Is Unsafe and Inefficacious
KER-065 Is Unsafe and Inefficacious We do not support the continued development of KER-065 for Duchenne muscular dystrophy (DMD) o Keros took the exceptionally unusual approach to descend dose levels in the multiple ascending dose (MAD) portion of their healthy volunteer study for KER- There is clea
Slide 16: KER-065 Is Unsafe and Inefficacious (Cont.)
KER-065 Is Unsafe and Inefficacious (Cont.) KER-065 demonstrates weaker muscle-building efficacy than even a previously failed treatment in DMD, underscoring its limited therapeutic potential Thigh muscle volume – placebo adjusted KER-065 5% 4.8% taldefgrobep alfa 4% 3.4% 3.5% 3% 2.0% 2% 1% 0.5% 0%
Slide 17: Disappointing KER-012 and KER-065 Data Caused the Stock Price to Plummet
Disappointing KER-012 and KER-065 Data Caused the Stock Price to Plummet… The market responded negatively to trial data from KER-012 and KER-065, which revealed serious adverse side effects Keros Therapeutics Stock Price1 Dec. 12, 2024 Aug. 7, 2024 Announced KER-012 Phase 2 $70 Released Q2’24 earnin
Slide 18: And Analysts Have Been Forced to Reassess the Company's Potential
…And Analysts Have Been Forced to Reassess the Company’s Potential Sell-side analysts have significantly lowered their sales forecasts following the release of KER-012 and KER-065 trial data Consensus Sales Estimates1 -84% -76% -76% -81% $839 $527 $274 $138 $158 $126 $67 $22 2027E 2028E 2029E 2030E
Slide 19: Analysts Have Cut Their Price Targets and Adjusted Their Ratings
Analysts Have Cut Their Price Targets and Adjusted Their Ratings The Company’s recent clinical setbacks appear to have eroded analyst confidence Mean Analyst Price Target1 % Buy / Overweight Ratings1 $92.63 $90.90 $90.25 $88.00 $81.89 100% 100% 100% 100% 100% -68% 79% 67% 62% $43.55 $31.00 $29.00 3Q
Slide 20: Keros' Mismanagement of Its Pipeline Has Destroyed Stockholder Value
KEROS’ MISMANAGEMENT OF ITS PIPELINE HAS DESTROYED STOCKHOLDER VALUE
Slide 21: Keros' Performance Over Recent Time Periods Has Been Disappointing
Keros’ Performance Over Recent Time Periods Has Been Disappointing… 1-Year Total Shareholder Return1 2-Year Total Shareholder Return1 3-Year Total Shareholder Return1 SPDR S&P Biotech ETF (15%) SPDR S&P Biotech ETF (9%) SPDR S&P Biotech ETF 10% Nasdaq Biotechnology Index (8%) Nasdaq Biotechnology In
Slide 22: And the Company Has Also Underperformed Over the Longer-Term
…And the Company Has Also Underperformed Over the Longer-Term 4-Year Total Shareholder Return1 5-Year Total Shareholder Return1 Total Shareholder Return Since IPO1 SPDR S&P Biotech ETF (39%) SPDR S&P Biotech ETF (21%) SPDR S&P Biotech ETF (2%) Nasdaq Biotechnology Index (12%) Nasdaq Biotechnology In
Slide 23: Keros Has Failed to Deliver Value During the Tenures of All Directors
Keros Has Failed to Deliver Value During the Tenures of All Directors Keros Relative Annualized Total Shareholder Return During Tenure1,2 vs. Proxy Peers vs. Competitors vs. Nasdaq Composite vs. Nasdaq Biotech Index vs. SPDR S&P Biotech ETF Nima Farzan (11%) (17%) (26%) (12%) (8%) Carl Gordon (11%)
Slide 24: Dr. Mary Ann Gray and Dr. Alpna Seth Have Poor Track Records of Creating Value as Directors
Dr. Mary Ann Gray and Dr. Alpna Seth Have Poor Track Records of Creating Value as Directors Dr. Mary Ann Gray Dr. Alpna Seth Annualized TSR vs. Nasdaq Biotech Index1 Annualized TSR vs. Nasdaq Biotech Index1 Palisade Bio (2019-2024) (91%) Sellas Life Sciences Group (2016-2017) (83%) Keros Therapeutic
Slide 25: Keros Is Overcapitalized and Inefficient
KEROS IS OVERCAPITALIZED AND INEFFICIENT
Slide 26: We Believe Keros Is Maintaining an Excessive Cash Balance
We Believe Keros Is Maintaining an Excessive Cash Balance We strongly believe Keros has the financial strength to return $500 million to stockholders while still retaining enough capital to fund any credible initiative currently being evaluated as part of the strategic alternatives review process Ca
Slide 27: R&D Costs Have Increased Significantly
R&D Costs Have Increased Significantly R&D expenses have grown, despite the failure of cibotercept and underwhelming KER-065 results R&D Expenses ($M)1 $174 $135 50% CAGR $87 $55 $34 2020 2021 2022 2023 2024 1. Source: FactSet. INVESTOR PRESENTATION | MAY 2025 27
Slide 28: We Believe Keros' Organizational Infrastructure Is Too Large
We Believe Keros’ Organizational Infrastructure Is Too Large Keros appears to have far more employees than it needs to advance its viable clinical opportunities Number of Employees1 Number of Employees per $1M of Projected Revenue1,2 169 2.7 136 +48% CAGR 105 1.3 1.1 60 0.5 35 0.3 0.4 0.3 0.2 0.2 20
Slide 29: Keros' Cash Burn Continues to Escalate
Keros’ Cash Burn Continues to Escalate Despite two clinical trial setbacks, Keros is still burning through approximately $40 million in cash each quarter LTM Net Cash from Operations ($M)1 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 1Q 25 ($3
Slide 30: We Believe the Board Has Disenfranchised Stockholders
WE BELIEVE THE BOARD HAS DISENFRANCHISED STOCKHOLDERS
Slide 31: We Believe the Board Has Disenfranchised Stockholders
We Believe the Board Has Disenfranchised Stockholders The Board has resisted our efforts to engage constructively and augment the Board Blocked Stockholder Rejected Our Requests to Nominations After Material Engage with Independent Rejected Additional Request for Adopted a Poison Pill Business Updat
Slide 32: ADAR1's Proposal for Change
ADAR1’S PROPOSAL FOR CHANGE
Slide 33: ADAR1's Proposal for Change
ADAR1’s Proposal for Change • Immediately reduce workforce by at least 70% to: — Drastically lower cash burn and meaningfully extend the Company’s operational runway Restructure the business 1 and reduce costs — Focus organizational efforts on advancing Takeda partnership and other essential activit
Slide 34: We Believe Our Proposal Could Unlock Substantial Value
We Believe Our Proposal Could Unlock Substantial Value Continue low probability and Return capital to shareholders and preserve unsafe development of failed assets Takeda economics for existing shareholders $6 $30 Modeled price/share with current Modeled price/share with our proposed plan2 managemen
Slide 35: Conclusion
CONCLUSION
Slide 36: We Believe Substantial Change is Required to Unlock Value at Keros
We Believe Substantial Change is Required to Unlock Value at Keros In our view, the Company’s underperformance and low valuation will persist without a change in oversight and strategy We have attempted to engage We believe the Board should We believe significant change is constructively with Keros